It Is The Economy

21 January, 2018

By: Alsir Sidahmed

The tense situation currently engulfing the country is a result of long delayed economic measures that should have been implemented seven years ago, when South Sudan opted for separation taking with it more than 75 percent of known oil reserves that has been providing the treasury with hard currency.

Apparently the government opted for the delay to avoid facing both the political backlash of the separation and the economic austerity measures at the same time.

Missing also from the whole scene is a clear message to the public that the budget with its devaluation of the national currency and other measures is a first step in a reform program to close the deficit through increasing exports with stipulated time table and specific targets to be met. More important the government should have started with itself cutting the fat in its spending in both political and executive areas so as to give a good example for people to follow.

Moreover, such measures are usually a product of the International Monetary Fund (IMF) brain and policies and are accompanied by a cushion in a form of a loan that helps the government meets some of its urgent needs. At the time Sudan was implementing these tough measures it witnessed some riots that were reacting to soaring prices. However, given the country’s long standing problems regarding IMF arrears there is no room for the fund to furnish some money. It only provided technical advice.

The same scenario was taking place in Tunisia with a difference. Tunisia was getting a $2.9 billion loan from the IMF. More important Tunisia is seen as the success story of the Arab Spring, where a new political system is being established with the participation of all forces. Yet those rioting in the streets were chanting for bread before democracy.

Even in well-established democracies and economies like the United States, economy occupies the center stage in issues of importance to the public. Former President George Bush learnt that lesson the hard way. Though under his watch, the US fought its first war abroad since Vietnam and became victorious and under his watch too, the Cold War ended with the US winning, but the public punished him for his economic failings and denied him a second term.

Economy has always been Sudan’s Achilles’ heel with successive regimes failing in utilizing the country’s abundant natural resources. In fact Sudan has been through three opportunities in the past to make a breakthrough, but failed in grasping them and make a difference.

The first following the independence euphoria where there was good reason to hope that the inherited civil service, education and a relatively reasonable economic base can provide a good start. However, that chance was squandered by political squabbling and the outbreak of civil war.

Then came the second chance with the oil boom that followed the 1973 Arab-Israeli war. With the abundance of petrodollars, Sudan was nick-named the breadbasket of the Arab world, which would be a new breed of combining Arab money, Sudan’s natural resources and western technology. With the exception of Kenana sugar project hardly anything of substance was achieved.

Then came the third opportunity, when Sudan managed to join the club of oil exporting countries. During a decade of an oil boom up to 2011, the country’s coffers received its biggest hard currency income in history, but failed to invest in renewable resources like agriculture despite the writing on the wall that the day of reckoning where there will be no oil revenue were quite apparent.

Now the government is starting a new program for reform with the help of the private sector and more emphasis on production to make the much needed turn around.

And the question is will it succeed this time?

Unlike the previous wasted opportunities, this time there is no margin or room to maneuver domestically or abroad. Domestically there used to be some unutilized resources and abroad the Gulf States have provided a haven for many Sudanese expatiates, who support their families and help channel some hard currency.

That is no longer the case given the difficult economic conditions Gulf countries are passing through to the extent that they have started levying taxes for the first time.

And that brings the issue back home. The only way to succeed and stand up to the combined politico-economic challenge is through making use of the past rich experience and put right priorities to make a break through.

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